House approves additional funding for Paycheck Protection Program

By Ken Tysiac

The U.S. House of Representatives passed legislation Thursday that will provide $370 billion in additional pandemic-relief funding for small business as part of a larger aid package.

President Donald Trump is expected to quickly sign the $484 billion Paycheck Protection Program and Health Care Enhancement Act, which was approved by the Senate on Tuesday. Most of the small business funding, $310 billion, will replenish the Paycheck Protection Program (PPP), which is administered by the U.S. Small Business Administration (SBA) and provides forgivable loans to certain types of businesses.

The $310 billion for the PPP includes $60 billion in loans to be made by small banks, credit unions, minority-owned banks, and other small lenders. Of that total: 

  • $30 billion is for loans by FDIC-insured banks and credit unions that have assets between $10 billion and $50 billion.
  • An additional $30 billion is for lenders with less than $10 billion in assets. Those include community banks, credit unions, and community development financial institutions, which provide loans to low-income communities and to people who lack access to financing.

Another $60 billion in small business funds not included in the PPP program will go to the SBA’s Economic Injury Disaster Loan program, which provides working capital loans of up to $2 million that small businesses may use to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the impact of a disaster. The interest rate is 3.75% for small businesses and 2.75% for not-for-profits. Of that $60 billion, $10 billion will go to small business grants of up to $10,000 for disaster relief that do not have to be repaid.

It was not immediately clear when the $310 billion in new PPP funds would become available or how long they would last. It took just 12 days for the initial $349 billion in PPP funding to be exhausted. Some banks said in statements posted on their PPP webpages that they continued to work on PPP applications even after the SBA stopped accepting them for the first round.

Jennifer Roberts, CEO of Chase Business Banking, said in a statement posted to the bank’s website Tuesday that the bank has decided not to take any new applications now as it continues to work on the large number of applications already in its queue.

“I wish we could help every business through this program,” Roberts said. “But funds could run out again quickly, and we have preexisting applications in our queue. We will continue to process and submit applications until funds are exhausted.”

The PPP was established as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, which was signed into law on March 27. The PPP initially provided $349 billion in forgivable loans that businesses could use to cover payroll, mortgage interest, rent, and utilities.

The program is available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans, according to the SBA and Treasury.

Congress authorized Treasury and the SBA to administer the program as an extension of the SBA’s 7(a) loan program. SBA lenders were flooded with PPP applications from businesses desperate for resources to help their businesses amid the pandemic.

By April 16, the SBA stopped accepting applications for the PPP after exhausting the initial $349 billion in funding. The AICPA issued a news release that day urging Congress to quickly approve additional funding for the program.

Data released by the SBA on April 16 showed that the program had approved 1,661,367 loans through 4,975 lenders.

Unemployment benefits claim data released Thursday by the U.S. Department of Labor indicated that the U.S. economy has lost 26 million jobs over the previous four weeks.

The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the pandemic, visit the JofA’s coronavirus resources page.

— Ken Tysiac ( is the JofA’s editorial director. 

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